How do we know whether a charity is successful or not? At Street League, we don’t think success should be measured by turnover, or by vague numbers of people “reached” as the sector terms it, or by a story about one or two beneficiaries. It should be measured by presenting what we do in a transparent way and allowing the public to decide.

This year, as part of that commitment to transparency, we have created an online impact dashboard, which is updated directly from our internal database. It shows the barriers young people faced when they came to us, whether they lived in the most disadvantaged communities, how many dropped out along the way (and why), the types of jobs they went into, and most importantly how many are still in jobs after six months (the main indicator of success for us). It shows the public how we’re doing month by month, rather than expecting them to wait a year or more for our annual report.

I am pleased to say that 147 organisations publicly supported the campaign, and we’ve seen some excellent progress from organisations including Think Forward. But we still have a long way to go.

A friend of mine recently joined the board of a large charity with a turnover in excess of £100m. She asked a poignant question at her first board meeting: “How do we know when we are successful?” The charity responded by telling her how many people they had worked with that year, but that’s not what she had asked. Amazingly they couldn’t tell her whether they were making a long-term difference, or successfully meeting their stated charitable purpose. I don’t think this is unusual.

Genuine impact reporting is very rare in the sector. Many organisations think they tick the impact box by reporting the number of people they’ve helped or reached, but that isn’t impact – it’s outputs. Impact is the long-term change which happens because of the organisation’s intervention.

Every year PwC examines the annual reports of 100 charities, as part of their Excellence in Reporting charities award. It’s a great initiative, which is helping improve transparency, but the charities shortlisted are selected because of the size of their turnover, rather than the scale of impact they achieve. It seems we have developed a belief that the financial size of a charity equates to how successful they are. Surely charities exist to improve people’s lives or the world around them, not to grow their turnover, right?

Thankfully more charities are refocusing their efforts here. In a well-publicised move, Mark Atkinson, chief executive of Scope, recently announced that he was refocusing the charity to become a “social purpose organisation”. This included the decision to reduce turnover by 40%, so the team can focus on impact rather than trying to grow their contracts.

And earlier this year, recruiters Gatenby Sanderson published a report looking at the changing role of the charity chief executive. They found there was a new focus on “growth in reach and impact as opposed to growth in size and scale”, and believe the next generation of charity chief executives will be less focused on increasing turnover. Of course, chief executives and trustees will need to be comfortable with taking risks to achieve that impact, given the uncertain environment within which charities operate.

With more charities embracing impact as their main objective, how would we create a top 100 list of impactful charities for PwC? It’s not easy – we can literally say whatever we like. Charities’ financial reports are signed off each year by an independent auditor, but there is no requirement to audit social impact statements. Perhaps the time has come to change that?

One thing is for certain – in an age where there is much less money around to achieve social impact, we have to find a better way of measuring success. Identifying how much money a charity has raised, or how many people they have reached will no longer suffice.

Talk to us on Twitter via @Gdnvoluntary and join our communityfor your free monthly Guardian Voluntary Sector newsletter, with analysis and opinion sent direct to you on the first Thursday of the month.

Looking for a role in the not-for-profit sector, or need to recruit staff? Take a look at Guardian Jobs.